Analysis of CAMEL Methods in Banks Soundness Level: A Case from Rural Banks in Bali Province, Indonesia

Abstract

Banking assessment is carried out by qualifying some substances of each factor, i.e, the components of Capital, Earning Assets Quality (EAQ), Management, Earnings, and Liquidity, or an abbreviated method known as ‘CAMEL’. The problem statements in this study are analysis of CAMEL Methods in Bank Soundness Level of Rural Banks 'SP' when noticed from the perspective of Capital, Earning Assets Quality, Management, Profitability, and Liquidity. This research category is descriptive quantitative and associative, i.e, using historical financial statement analysis. According to the results of the analysis that has been carried out, it can be inferred that the level of soundness in terms of CAMEL (Capital, Asset, Management, Earning, and Liquidity) in Rural Banks 'SP' from the last 5 years has been as follows: (1) The Capital aspect is in a healthy predicate because the Capital Adequacy Ratio (CAR) obtained is above 8 percent. (2) Productive Asset Quality Aspects are in the 'Healthy' category because the ratio score obtained is always below 10.35 percent (according to Bank Indonesia standards). Meanwhile, the PPAP Ratio is also in the healthy category because the ratio score obtained is always above 81 percent. (3) The Management aspect is in the 'Healthy' category because the credit score obtained is 91. (4) ROA Ratio components are in the ‘Healthy’ category because the ratio score obtained is above 1.215 percent. Meanwhile, BOPO Ratio components are in the ‘Healthy’ category, because the ratio score obtained is below 93.52 percent. (5) Cash Ratio components are in the ‘Healthy’ category because the ratio score obtained is above 4.05 percent. Meanwhile, LDR components are in the ‘Healthy’ category, because the ratio score obtained is below 94.75 percent.